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| The Netherlands harboring more than 20.000 letter box companies |
A White House factsheet
in 2009 reported. "Nearly one-third of all foreign profits reported by
US corporations in 2003 came from just three small, low-tax countries:
Bermuda, the Netherlands, and Ireland."
Like
the Queen in Shakespeare's 'Hamlet' who protested that 'The lady doth
protest too much, methinks,' the Dutch government hypocritically
objected to the Netherlands being dubbed "a tax haven" and the White
House agreed and deleted the line.
The
Dutch tax haven, has now more than 20,000 letter-box companies and in
recent years even Facebook joined U2, the popular Irish rock group, to
circumvent the tax system..
The Netherlands also hosts thousands of foreign financial vehicles. Bloomberg reports that a bookkeeper’s home office in Amsterdam also doubles as the headquarters for a Yahoo! Inc. offshore unit.
It
is a scandal that deficit-strapped Holland is raising retirement ages
and taxes on the working classes while the Netherlands’ Government of PM
Rutte and coalition partner Samson despite their vows to change the law continue to allow their country to
be a €10.2trillion conduit on the global tax-avoiding network.
Bloomberg
says that attracted by the Netherlands’ lenient conservative policies
and and an extensive network of tax treaties, companies such as Yahoo,
Google, Merck & Co and Dell have moved profits through the
Netherlands
Using techniques with nicknames such as the “Dutch Sandwich,”
multinational companies routed €10.2trillion in 2010 through 14,300
Dutch “special financial units,” according to the Dutch Central Bank.
Such units often only exist on paper, as is allowed by Dutch law.
Google, IBM and Italian oil and gas group ENI head the list of companies
using letter-box companies to cut their Dutch tax bills to between 0
and 5%, the Volkskrant daily said in an article.
According to theDutch Financieele Dagblad , French state companies are also among those using the Netherlands to cut their tax bills.
In the meantime the Dutch Governmen has been dancing around the subject.
Frans Weekers, Dutch deputy finance minister, said the controversy over the
letterbox companies had damaged the Netherlands’ investment climate. “Over the past 10 years the trend has been for the number
of letterbox companies in the Netherlands to keep growing. I want to turn that
trend around,” Weekers
told The Financial Times. “I see the Netherlands being portrayed in a bad
light. I don’t want to be portrayed in a bad light."
Recently the Dutch government said tax
treaties with Zambia and 22 other poor countries will be revised to allow the
incorporation of anti-abuse clauses where necessary,
but has not said a word about the major players which have letter box
companies registered in the Netherlands and are involved in these tax
evading schemes
The European Commission has now said it will attempt to close a loophole that allows
companies to cut their tax bill, a top official said on Monday, but the
EU executive will first need to persuade member countries to back the
change.
The commission wants rules to prevent companies setting up
“letter-box subsidiaries” in countries solely to qualify for a softer
tax regime and cut their bill.
Algirdas Semeta, the EU’s taxation commissioner, wants to insert an
anti-abuse clause by the end of next year, allowing authorities to
target artificial “parent-subsidiary” schemes that flout the spirit of
the tax code.
“When our rules are abused to avoid paying any tax at all, then we
need to adjust them,” he said. “Today’s proposal will ensure that the
spirit, as well as the letter, of our law is respected.”
Semeta declined to name countries or companies that exploited the loophole but said that billions of euros were at stake.
EU-Digest
